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Will the FDA Hold Back Medical Innovation?

Kurzweil’s Law of Accelerating Returns is the observation that as technologies advance, the rate of change continuously increases. Innovations build off previous discoveries, so that the greater the aggregate level of technology, the more potential there is for further advancement. Now that the Internet has made the entirety of human knowledge readily accessible to anyone who cares to look, opportunities for invention have never been greater.

Nowhere is this more true than in the medical industry. Health care being one of the most important issues of our time, people are looking for any way to reduce costs and improve their health. Consequently, there have been a slew of medical apps being developed for mobile devices, a rush of innovation that federal regulators have been unprepared for.

Mobile applications with a wide variety of medical uses are currently being employed both by doctors and individuals taking charge of their own health. WebMD has published an app that allows physicians to check the interactions between medications. There are apps for viewing retinal images and MRIs, as well as apps for monitoring sleep patterns and nutrition. These are only the first steps into a world of medical mobile devices with practically unlimited potential for changing the way we think about health care.

At present, the FDA has been largely unable to come up with a coherent policy on regulating these apps, and are currently working to decide how to handle the industry. Currently they review only twenty apps per year, but that could change soon as the industry expands and as pressure from more traditional medical organizations mounts.

Already, some analysts are complaining that apps are being released too quickly for regulators to properly oversee them, or in other words, that people are innovating too much, too fast. Organizations such as the National Cancer Institute and West Health assert that they are concerned over the health consequences of unregulated health apps but, as Nobel Prize-winning economist Milton Friedman pointed out, there is another side to regulation that nobody talks about.

While it is true that there is the potential for harm from unregulated medical apps, there is also the potential for the prevention of harm. Obviously, no one wants to hurt people, as doing so would damage their brand, and so the frequency of negligent or malicious apps should be low compared to those that actually help people. Any time spent in regulatory review, therefore, is time during which people are not able to access the app and gain its intended benefit. This is the cost of regulatory review: that some people will not get the help they need.

Unfortunately, these costs are impossible to measure, since we have no way of knowing what would have happened in a counterfactual situation. The tragedy of someone who does not get needed medical help due to regulatory delays is not visible in the same way as that of the person who is harmed by incompetence or negligence, and so the latter receives undue prominence in the media and in the public consciousness.

Now, with the emergence of the decentralized app market, the FDA is faced with a choice. They can either tighten their regulatory grip, investing ever more money and manpower into trying to keep up with the pace of technology, or they can let go and allow innovation to proceed unhindered. At some point, the former will become an exercise in futility, but whether the FDA will ever realize that remains to be seen.

In his first State of the Union speech, President Trump once again promised to lower the swelling costs of prescription drugs. The question is – will the administration do it without imposing price controls.

Time and time again, the federal government has encroached into a sector of the economy and imposed a one-size-fits-all regulation that stifles competition, hurts small businesses, and creates troubling criminal penalties for lack of compliance. This is epitomized in federal involvement in menu labeling -- regulations and requirements for private businesses to disclose caloric information on physical menus.

In his first address to Congress last month, President Trump criticized the Food and Drug Administration’s “slow and burdensome” drug approval process for preventing “too many advances…from reaching those in need.” Indeed, the FDA has repeatedly proven to be a bureaucratic quagmire that slows the development of effective, affordable medication and helps to inflate the price of some drugs to absurd levels.

Pro-free-market activist groups, including FreedomWorks, banned together in support of challenging the Food and Drug Administration’s regulations against the e-cigarette industry. These regulations require all e-cigarette and vapor products that came to market after February 15, 2007, undergo a premarket application (PMTA).